The idea in this article is sometimes true, but it completely fails to take into account the relentless march of technology. Some items, such as cell-phones or laptops, will be totally obsolete within 10 years no matter how finely made they are. Other items, such as guitars, will not be obsolete since the technology isn't changing quickly, if at all. There will be new digital guitars with funky synth modes every year, but a gibson dobro will still sound like a gibson dobro in twenty years.
Some things fall somewhere in between. Your grandfather's watch is a marvel of mechanical engineering that will keep time adequately for centuries if taken to a watch-shop for maintenance every few years. That maintenance will cost more than buying a new timex would, and the timex will keep far more accurate time. Timex's are disposable. When the timex's battery dies it will probably cheaper to replace it than to replace the battery. However, their function is superior for all practical purposes. Many people currently enjoy the aesthetics of mechanical watches. They're currently enjoying a major surge of collectibility, but that wasn't the case twenty years ago and it may well not be the case twenty years from now.
The real trick is to figure out what can last and what should be treated as disposable. e.g. Say you're building a home theater. Amps have changed very little over the last 20 years. Preamps and receivers go obsolete every few years. If you spend $5000 on a Bryston amp it will easily last 20 years (that's how long it'll be under warranty!), but a Bryston preamp will be hopelessly unusable long before that 20 year warranty runs out.
There are also big variations in short-term durability too that aren't necessarily correlated with price. e.g. Macbook air's and the new retina pro's are gorgeous pieces of engineering, but they're made to be disposable. If you spill coffee on them they're basically done. You can't remove the battery and take them apart to clean them (proprietary screws) like you can with a much cheaper laptop and Apple won't lift a finger to help you. This is a case where our perceptions of what is durable and high-quality can actually lead us to buy something that won't last as long!
As an anecdote to add to your great analysis, I know a lot of my engineering coworkers (including me) who refuse to buy new cars. I drive a 15 year old truck not because it's fuel-efficient, not because it's beautiful, not because it has all the features, and certainly not because it needs no maintenance. It's because when it does need maintenance, I can do it and it's relatively cheap and easy. It's the Timex vs pocket watch thing, except in this case the Timex is much more expensive. Repair-ability is decreasing the more computers there are installed in a car.
The one new car I owned quickly became dated, even though I bought it with the latest technology (it even had a Windows Mobile USB port!). My truck doesn't have any technology to become outdated. It's the RHEL of the car world compared to the Ubuntu. Not flashy or cutting edge, but bullet-proof and easy to dig into the internals. I'd rather have something I can put 400k miles on than something with an iPod port or built-in GPS that will be worthless when it hits 150k.
Cars are a good example of why "built to last" doesn't make universal sense.
We don't make trucks like we did 15 years ago, because we know what happens to the human body inside a rigid metal shell during a collision. We know that we can design engines and transmissions that will keep you on the road better, keep you out of more accidents and at least halve your fuel bill. And these gains will trivially outweigh the higher costs for maintenance, repair costs and increased frequency of replacement.
Similarly with major appliances like refrigerators, furnaces and hot water heaters. It's not at all uncommon to see people with older versions of those appliances that are 30+ years old, still tickin and trivial to repair and maintain. But they're so horribly inefficient that even if you replace that classic with a modern model that will fall apart the day after its warranty expires, you can save so much more money in the interim that you'll still be ahead after you replace it.
Now, I'm not arguing that you should go out and buy the latest. Or that aiming for longevity and repairability is never right.
I'm just saying that there are trade-offs when something is "designed to last" and "easy to repair". And, particularly when moving parts and electronics are involved, those trade-offs can cost more in the long run.
you can save so much more money in the interim that you'll still be ahead after you replace it
Are you seriously saying that the price of e.g., a new $1000 refrigerator + the cost of running it for 10 years is going to be less than the cost of running an existing 10 year-old model?
Now, I have to admit that I haven't done the math (beyond a back of the envelope estimate), but I'm having a hard time believing that it's even close, unless you live in an area with astronomical electricity rates.
In order to be cost efficient tradeoff, a new refrigerator should save 100 bucks a year on the electricity bill, or roughly 8 bucks a month.
This site (http://www.refrigeratorefficiency.com/efficiency-matters/ref...) seems to think that is plausible.
> Consider Upgrading
>
> Consider replacing refrigerators that are more than 10 years old. The efficiency of modern refrigerators can be over 40% greater than older models. This can save $15 per month on your electric bill.
Ten year old, probably not. 30 year old, and it becomes possible - some of those (per http://appliancecalculator.stanford.edu) wind up using over 2000 kWh/yr. Of course, if the 10 year old one is in not-great repair, that probably increases its energy use (think a poor seal, funky motor, clogged whatever), and leaving it be might well cost more than replacing, and the real question being between replacing and repairing.
A good point about reliability not being the only factor in buying a car. I drive a Toyota 4Runner, which has a 4-star safety rating. It's from years before pedestrian safety laws, so the pedestrian safety rating is low, but the passenger safety rating is quite good. 20mpg is still hard to get from a V-6 truck engine these days. The only modern safety features I wish I had are hill start assist and traction/stability control. Maybe side-impact air bags.
Your point is perfectly valid for most cars. I would never drive a Corvair just because it's more repairable than a Volt. But there certainly is a market for a dead-simple yet modernly designed car.
> "20mpg is still hard to get from a V-6 truck engine these days."
True enough. But 4 cylinder engines are turning out 150hp and 3500 pounds of towing capacity these days. So the V-6, in and of itself, may not be an appropriate requirement.
As to the market: perhaps. I'm not saying it's impossible to find a modern middle-ground. But I don't know how many people even want to lift their hood these days.
This past model year it's already started to become somewhat common for commuter cars to ditch the spare tire. And perhaps more bothersome, it's pretty difficult to find drivers who really care that they're missing.
> But there certainly is a market for a dead-simple yet modernly designed car.
It's a shame that those two things are contradictions in terms, then. Even if you were to keep only the safety features from a modern car, it would still be many times more complex than your 1975 dodge pickup.
Where do you get your information regarding the environmental costs of manufacturing and disposal of vehicles and large appliances so that you can make this judgement?
Ideally, the environmental costs of manufacture are built into the list price. And the costs of disposal/recycling are offset by the consumer-facing price of disposal and from the value of any recovered materials.
The degree to which those two things isn't true is well outside the capability of an individual market participant. I'm at the mercy of intermediaries to expose failures in this regard.
And holding onto old products isn't much better in that regard, as I also have incomplete information on where those old parts are going, where the new ones came from, what they were made of, what hidden costs are buried in the repair business' books, etc. To say nothing of issues such as extending the life of products that rely on now-banned chemicals. Leaded paints, refrigerants like Freon, etc.
Good advice I got: "A high-tech car means high-tech repair bills". I drive a minivan from the utilitarian days when they still had a spare tire. A cassette deck device that plugs into a modern music player works fine. My external GPS will always be current too.
Paying too much for something works if you have no idea how to actually judge the quality of the item. I know computers and bikes, and will not pay too much for those thing, because I know the quality and I know the cost. I have no idea about cars, or houses, or shoes, so I have not way of judging the quality of these items.
Just because you don't know now, doesn't excuse you from not knowing when you go to make a purchase. There are a number of ways to acquire knowledge out there. Go get it.
To a point. But there aren't enough hours in the day to become an expert in buying everything one has to buy, and in many cases predicting the durability of something is really difficult.
I guess this is in large part why brands are so valuable, as they give consumers a seemingly easy quality heuristic.
The term you may be looking for is: Rational Ignorance
Rational ignorance occurs when the cost of educating
oneself on an issue exceeds the potential benefit that
the knowledge would provide.
Ignorance about an issue is said to be "rational" when
the cost of educating oneself about the issue
sufficiently to make an informed decision can outweigh
any potential benefit one could reasonably expect to gain
from that decision, and so it would be irrational to
waste time doing so. This has consequences for the
quality of decisions made by large numbers of people,
such as general elections, where the probability of any
one vote changing the outcome is very small.
You can rely on the opinions of experts for many large purchases, like cars. For smaller items it's usually good enough to look for hallmarks of quality; e.g. whether the wood in the furniture is solid.
I agree. Time is our most valuable resource and it's a cost/benefit matter as to whether it's worth your while looking in-depth at purchasing options for a particular type of product.
Just don't go overboard with looking for the absolute best.
Your post reminded me of "The Paradox of Choice" [1], a book by Barry Schwartz that I read not long ago. One of the claims that the author makes is that satisficing is the best maximizing strategy. After factoring in stress, wasted time and dissatisfaction that result from looking for "the best" product or price it turns out that paying a bit more for a product that is good enough is cheaper.
But how can you decide whether a product is a good trade-off when you don't know what the best is? I think that leaving the decision to trustworthy experts is the most viable solution.
EDIT: Actually, your best long term investment could be learning how to spot trustworthy expert advice.
If you'll ever buy a car or house you should know their quality; you can rely on the judgment of others for that. For cars it's usually easy: Japanese or Hyundai. Car magazines rate their quality. For houses, it's generally ones from 1960 to 1980. An inspector can judge the quality of a house.
> However, their function is superior for all practical purposes.
These days, when everyone has a pocket-watch in their pocket, "jewelry" is more of the function of a wristwatch than perhaps ever before. A $10 timex is inferior for this practical purpose, however much better it is at actual timekeeping.
You're probably both right but the OP is more interesting because people generally subscribe to your point of view. Which is the whole reason the OP's post needed to be written.
A while back, I stopped buying the highest-priced goods and started doing research instead. What I found what the best things weren't the highest-priced. I also found that I could find the best items for me because what I care about isn't necessary what others care about.
Using this, I've managed to buy better shoes, toasters, and even a car than I've ever had before, and at less than I would have spent if I hadn't done that research. The car ended up being the cheapest car made by that manufacturer, and I like it better than any other car I've ridden in or driven. (Admittedly, I haven't tried anything over about $50k, but I couldn't afford those anyhow.) I would never have found it if I used price as an indicator of quality, instead of reviews.
The key to reviews is to look over the good reviews. Look at the bad reviews instead. Find out what people hate about it. And then ask yourself: Does that feature matter to me?
My rice maker doesn't make brown rice well at all. Many people complained about that. However, white rice is the only kind I make, and it does a great job on that. So it didn't make sense to spend twice as much money on a better rice maker. I could have spent more money and gotten an objectively better rice maker. But why bother?
So no, I don't agree with paying too much or buying the 'best'. At all.
You're actually agreeing with the author without realizing it. Why? Because you decided to buy X because it was valued at a certain price and you could afford it. You didn't buy a "cheap" (in quality) version of the product (since you did your research). Unknowingly you are agreeing with the author. :-)
Except the author is arguing that you should use "expensive" as a heuristic (instead of "cheap"). wccrawford is arguing that quality is orthogonal to price.
What I found what the best things weren't the highest-priced.
Agreed; I've found the best things are often in the ~75th percentile of price. High quality goods are rarely bargain-basement priced, and non-luxury choices usually perform better than their more expensive luxurious counterparts.
I don't agree with most of this. The idea that price equals quality has long been used by merchants to extract money from consumers, not extend value. Sure it's true of some products and some companies, but overall I'd argue that at best, more expensive things aren't close to being relatively better - by any meaningful measure.
A $300 meal isn't 10x better - in terms of taste (subjective obviously) or nutrition - as a $30 meal. A BMW 3 Series is a better car than a Ford Focus, but looking only at the practical reasons to own a car, it's not even close to having twice the value.
In a lot of cases, brand names bring no value other than the brand. And while that can have a placebo effect, it's not more value. Medicine comes to mind as a great example. You are paying more for marketing and packaging than you are for R&D. The recent thread on memristors even highlighted that R&D costs are 1/100th of total cost, with marketing taking the lion's share.
Quality items appreciate while cheap items depreciate? No consumer good should be viewed as a financial investment. If something does appreciate in 50 years, it'll be more about luck than anything else.
As a personal anecdote: when I eventually stopped growing taller (~19), I started purchasing clothing and outdoor gear that was a step up from the quality of when I knew that I'd grow out of things. While not universal, I did notice a definite uptick in the durability and comfort of most things. It's obviously possible that this was a placebo effect or maybe I'm nicer to my gear now, but I've certainly been getting more out of the expensive things.
The placebo effect appears to be massive, at least where it's been studied (wine, for example). I'm happy to admit that, as a general rule (coughjaguarcough), higher prices indicate better quality, I just don't think it translates into better value (again, as a general rule).
Sure, highly functional things, like shoes and a bed, probably warrant paying more even though the value isn't proportional. Paying 50% more for shoes that you wear 8 hours a day which are 25% better (comfort, health, style) makes sense to me. But jeans, kitchenware, cars, medicine, food, electronics..the list goes on and on where I feel that, again, in general, cheaper is better.
As studies have shown, money should be spent on buying experiences...not things. It's the trip to Spain that'll make you happy, not the $1500 DSLR camera that you use to take pictures while you are there.
Owning $800 of camera equipment doesn't make me happy, but using it does. Looking at my Macbook Air doesn't make me happy, but writing code on it does.
A Jaguar doesn't get you to work any better, but as has been pointed out, driving even a BMW 330 is a hell of a lot of fun every day.
Totally disagree about "jeans, kitchenware, cars, food, electronics". All of those benefit greatly by quality (and thus cost). Medecine is a special case since so much cost goes into development (sorry, I don't believe you on the bulk of it being marketing).
Apologies, as seen by GlaxoSmithKline's recent $3 billion fine for illegally bribing doctors, you are also paying their legal fees for unethical practices. (1)
Also, the industry spends more on lobbying than any other industry (2)
According to a study by York University, they spend twice as much on marketing as R&D (3).
A trip to Spain is 50 hours or so of my life. Driving a cheap car easily exceeds 400 hours a year, for around ten years. I'd rather have a comfortable, well made car to drive in than a once in a life time trip. YMMV.
> The recent thread on memristors even highlighted that R&D costs are 1/100th of total cost, with marketing taking the lion's share.
I read that too, but what they meant was that development of an actual product costs Hewlett-Packard 10 times as much than the research of the underlying technology. And commercialization costs again 10 times more. "Commercialization" is a catch all term, of course marketing, but for the most part this means building factories, tooling and machinery. Ramping up production is difficult and binds tons of capital investment.
The key word there is can. A $300 meal may be the best meal you've ever had, but spending $300 on a meal isn't a guarantee that it will be. Conversely, it's also possible that $30 meal could be the best meal you've ever had. Less likely, sure, but possible.
It reminds me of advice I've been given from friends who are really into wine: the difference between a $10 bottle of wine, a $50 bottle of wine, and a $100 bottle of wine isn't that the more expensive ones are better, it's that they're more likely to be good.
There is at least some evidence that an expensive bottle of wine tastes better because it's expensive. When the cost of the wine is unknown to the taster, the differences disappear.[1] And, when a wine is presented to the taster as expensive it is perceived as better than cheaper wines even when it is the same wine.[2]
Your first article, at least, comes with a strong caveat: "We find that, unless they are experts, individuals who are unaware of the price enjoy more expensive wines slightly less." (emphasis added)
If you and I were to get together and agree on a certain aesthetic, and then we were to declare people who agreed with our aesthetic "experts", and then we were to test random people against our set of experts, our experts would agree with our aesthetic more often than the others.
That says nothing about peoples enjoyment. If people, experts or not, enjoy expensive wine more than inexpensive wine, they still enjoy it more even if their reasoning is flawed.
I'm not sure I understand what you're saying. You seemed to originally be claiming that there isn't an appreciable aesthetic difference between cheap wine and expensive wine, and that all wine is basically the same when you don't think about price ("When the cost of the wine is unknown to the taster, the differences disappear.")
But the article you provided seems to say that there is a difference between cheap and expensive wine - it's just that most people are not good enough to detect it. I think this is important because it invalidates the claim that "all wine is indistinguishable." There's a difference, it's just hard to detect, and the pros are better at it.
To return to the original point of the thread, though, wine actually is a pretty interesting example that complicates the original poster's point. The more you wine you drink, the more important it is to pay extra. It's not that the expensive stuff isn't better, it's just that you have to care a whole lot to appreciate the difference, so most people actually will be fine just getting relatively cheap wine.
That reveals more about the power of expectation and prompting than it does about wine. Any respectable wine or beer taster will do it blind, without knowing the cost or the make or anything. And their results are repeatable - I can't speak for wine, but with beer, there are licenses that you get by taking repeatable tests.
The best meals I've ever had were generally cooked by me or someone I know personally, and were shared with good friends or family. An outdoor BBQ 20 years ago. Christmas dinners. Camp meals backpacking. Mom's home cooking after workouts as a kid. Picnics out of doors.
I can think of maybe two or three restaurant meals that were memorable. The best of these a long long time ago with a girl I was very fond of, in a small rustic tavern. Expensive? No. But exquisite at the time.
Pizza sells for $6.50 at my local store, but I'm sure pizza stores would still exist if they were priced at $10 instead, except there will be less stores.
As you go up in quality, it gets harder and harder to scale because..., how many celebrity chefs can you find in a city? You might find a dozen, but it would probably be very expensive to get enough chefs to staff shops in every suburb.
Prices are a function of demand AND supply. It simply isn't possible to supply enough celebrity chefs at $30 a meal. If there was such a shop it will have a long line stretching out around three blocks every night.
You won't get 10 times better meal by paying 10 times more; It just means the price equilibrium is 10 times higher. There's nothing to it, I don't think it is intentionally "used by merchants to extract money from consumers". They price their products at a point to maximise profit, and that's all there is to it.
Be careful with that. Your "practical" reasons are not the same as everyone else's. For a financial consultant, a "practical reason" for owning a Mercedes is that it implies the owner is successful. That's exactly what you want your financial consultant to signal. From his perspective, he may be happy with the Focus, but knows that he won't get the same type of customers if they see him driving it.
I'd agree that consumer goods shouldn't be seen as financial investment. However, if anything was to increase in value it's likely to be well the known and high quality "classic" model because it takes a place in history and the company survives, not the cheap knock-off that no one will remember about or cares.
There is definitely some items where the article's argument holds true. Furniture is definitely one. I can buy a Stickley table (very expensive) and my great grandkids will be using it in their home. Clothing is another. Cheap clothing degrades very quickly where quality items can last many years.
I don't think the Op is getting as much love as he deserves.
Many of the intangible pieces that make up the quality of a product or service
go out the door when we’re getting a deal. They’re doing a favor and sometimes
when we bargain, people resent us.
This is absolute gold when it comes to longer business relationships. I have come through to believe that entirely too many fail simply because someone is resentful over terms.
As for the relation between cost and quality, I agree with many here that it isn't clear-cut. But the relation does exist. You just need to be discerning, which is why the Op writes:
Because we only buy quality, we are forced to wait until we can afford what we
really want. That wait time leads to better decisions, and it forces us to
make due with what we have.
True. I guess the ideal is to be seen as someone who is generous but has high expectations and will not hesitate to terminate the relationship and move business elsewhere.
The highest priced items are that way mostly due to the marketing costs associated with selling high priced items and trying to create the illusion that it is better quality.
Lifetime guarantees are pretty much worthless because most people will forget they have one, lose the item or lose the documents related to it.
Top pay doesn't attract the best people. Top work attracts the best people because the best people have most likely realised that money doesn't really matter if you're working on something that doesn't provide meaning for you.
The sweet spot for quality is to figure out the approximate average price of the product you want to buy and then pay a little above that.
This article is based on a number of nonsensical assumptions:
1) That paying more equates to higher quality. It doesn't. Your £30 t-shirt will fall apart every bit as quickly as your £3 multi-pack from Primark.
2) That you want to have something last a lifetime. Just last weekend, my dad was complaining about having no good jig-saws. Then followed up with "of course, I could buy a good one, but I only use them once every 5 years, so they're knackered when I need them anyway".
3) When you want quality, you can't just borrow it off someone else.
I'm not against paying more for something e.g. my uncle has expensive joinery kit because his day job is a joiner. I simply dislike the mentality of "I must pay top-dollar for everything", before you've evaluated what you actually want.
I'm not sure I'd say this article is wrong, exactly, but it sure seems like all the arguments in it are very shallow. Yeah, I have my great-grandfather's pocketwatch, and it still runs. But it has required repairs that each cost significantly more than buying ten brand new cheap watches would have. It's the least reliable timepiece I own. And I hardly ever use it, because my cellphone is always with me and is considerably more accurate -- and is not the only heirloom I have from my namesake great-grandfather! Its main value to me is pure sentimentality.
I'm sure other watches were purchased by my other great-grandfathers; to the best of my knowledge, none of those watches survived to the present day. It might be because they only bought cheap watches. But it might also be that they bought expensive watches and those watches broke or got lost. Looking solely at what survived to today tells you very little about what was purchased yesterday.
And I'm sure my great-grandfather didn't buy the most expensive watch possible. If it had come down to the choice of buying a watch which cost $10 more, or saving that money to give me $200 today, I'd take the money!
On the other hand, I've noticed, and others have observed as well, that generally more expensive items are more likely to have poor reviews on Amazon, for example. The most likely explanation is that higher prices lead to higher expectations, which are often hard to meet.
Another point I'd like to make is that cheap stuff can be totally awesome, especially if you don't need or want it to last a lifetime. Example: IKEA. My girlfriend changed her mind about the furniture she wanted in her apartment several times over the few years she was there, and was able to update the look to be exactly what she wanted for very little money. Compare that to the armoire I payed an ass load of money for that will surely last a lifetime, but doesn't really fit anywhere in my current home.
Though I imagine you could easily sell your armoire for close to what you paid for it (if indeed it hasn't actually gained value). I don't think there is a market for second hand IKEA furniture.
You have to weigh up between the money you lose in scrapping the IKEA apartment vs. the dead money tied up in quality furniture "inventory" and the relative difficulty in selling that to free up the funds again.
I wish the article was true. It'd be so nice to simply pay a premium and rest assured that it's an equitable approach: you get an improved product, the retailer gets a higher profit, the distributor, the people actually creating the product get a cut.
The reality is you can't rely on any single of these to be true, and as soon as you're willing to buy something and especially if you're willing to pay 10, 50 or 100% more than the absolute minimum you're the prime meat of the other half of the worlds who make it their business to ensure that it's not an equitable approach.
One key way in which the article is right on-the-money, so to speak, is to highlight the ridiculous frenzy that we go into to save disproportionately small amounts of money.
Our audience here is mostly programmers. Programmers should all know the golden rule of optimization: profile it first. Don't take it on intuition or faith that "this is what was slowing me down" unless you've measured it. The same principle applies in personal finance. Group together your expenses into some key logical categories -- "groceries", "tech", "rent", "retirement", "health", "nights out", and whatever else makes sense to you. Then add them up, do the maths. Know what you're spending and how it compares, and how the categories make up your monthly budget.
Frugality is generally quite good, but just like code, it's quite possible to overoptimize it into a time-sink.
Also, it's key that you see both the high-cost single-time expenses and the low-cost-but-everyday expenses and you get an idea for how they compare. Depending on how often you visit Starbucks, it might be a very good or very insignificant change to brew your own coffee at home; go on and measure it.
The single most surprising thing that I discovered about this process was that, even though I feel like I give money to beggars in the street "often" (i.e. whenever I see them and they ask) and give "a lot" (i.e. much more than is normally typical), the amount that I give actually works out to almost nothing on a monthly basis. Like, I'm poor and right now I have no proper employment (they don't pay you to do a Master's degree) and yet I can still afford to be generous to the people who are down on their luck, and it's just nothing when you compare it to the amount I'd save if I stopped drinking cola. I've got no income, but I'd still easily spend € 50 on food to throw a party for my friends, so long as it happens only about once a month, twice max.
I think you did a great job of trying to relating this topic to the programming mentality here. Many of the comments here seem to focus on how technology should not be purchased expensively or how this or that is not worth the extra money.
The author does not set in stone that you must go for the more expensive item. He does qualify that some things, such as phones, are disposable and should not be approached with the "buy expensive" mentality.
As always with the "Do <not-very-popular thing> and get <obvious-benefits>" articles, there is an obvious question: why doesn't everybody do that? I cannot speak for other people but here are my reasons for not always going for the quality over price.
First, I obviously cannot always afford the high price. When I bought the car I had checked the failure reports and decided it just wasn't worth paying an additional few months salary to get the failure probability down 2-3 percent a year (checked other parameters too, similar conclusions.) And yeah, I waited till a good deal was available to me.
Second, getting a quality item might cost even more of my personal time - finding out which one is actually good and searching for a local vendor isn't exactly free.
Third, maybe I don't even want an expensive item that lasts forever. Suppose I want to get into photography but don't really know if I'll keep this hobby. I'd intentionally google "cheap beginner dslr" and stick with the findings. Chances are that by the time it needs replacement I'll be ready for a more fancy gear or bored with the new hobby. Win-win :)
1. It's not always true that things that are more expensive are also higher quality. But the reverse is true: things of higher quality are more expensive. Because they're made of better materials, because they were grown naturally, because they were made of natural ingredients, because they were tested... better stuff is usually made with more effort or better material.
2. Because of #1, distinguishing genuine high quality stuff from a simple ripoff takes critical thinking. People don't like thinking too much, don't like analyzing, and critical thinking is unpopular especially in United States of America.
http://www.youtube.com/watch?v=u5um8QWWRvo
My stepfather is a carpenter and the maxim he passed down to me is "buy cheap, buy twice". It applies particularly strongly to the tools of your trade, doubly so if those tools are physical things like saws and hammers.
I've found this to be very true in many ways when buying 'quality'. Buy 'quality' and not 'crap', and you will always be happier and the OP's statements are all true.
I think price is a poor estimator for quality since marketers know that price alone can signal quality, so it stands we need something beyond price.
How do we determine if something is quality when price is unreliable.
Totally agree. I'll happily spend more if I know I'm getting something that is better quality. But figuring out whether those £150 hiking boots are any better than the £30 ones (to use a recent personal example) is very difficult. It generally takes experience. Lacking that I try to find advice from a trustworthy source. The internet has helped massively in that regard.
Sometimes the brand is an indicator of quality. At times, even in the same brand the quality varies across the make/model.
Ask around and that is the only way.
I think what the article is trying to say is "Buy the best quality that you can afford". Unfortunately the Author has completely conflated Quality with Price.
The main point - rule of thumb - that can be derived:
consider removing price as the default decision criteria
Most of the comments here (and parts of the original article) are elaborations on applying this principal. So price is not necessarily correlated with quality, but using price as a default decision criteria results in suboptimal outcomes (stuff that is not really "better" or consumers that are happier or otherwise benefited).
I definitely disagree. Maybe sometimes, paying twice as much gives you something that lasts ten times longer. Or maybe, you will pay five times as much, and get something that (hopefully) lasts a bit longer.
I use a lot of earphones, and they tend to break quite fast. Once or twice, I decided to move away from the usual 15$ models and pay 60$ for better brands, with good reviews, and everything. Did they last longer ? Of course not. They sounded marginally better, but nothing worth the price..
The thing is, price is an indicator of positioning. It's a marketing tool, and it's generally not correlated to quality. Buying the very cheapest is usually not a good idea, because the manufacturer probably did everything it could to actually beat competitors and propose the lowest price. But other than that, that's pretty much all you can know in advance.
Knowing what items are made of good quality and will last longer (and therefore are worth paying an extra for) is very hard. So, my reasoning on that is that I prefer to spend less money on something, since on average, it will live just as long.
Regarding the headphones, some 7 years ago I've bought Phillips hp805 after reading an article that titled them "king of the budget cans", they've cost something around $30 and are the most comfortable headphones I've ever had on my head and the sound quality is great too.
After all those years they work like new, though I do have a habit of being careful with things. I'm afraid of these breaking because I'd have no idea what to replace them with.
Buy fewer than four pairs of $15 headphones in two years and you're still ahead. At least, you're still ahead financially; value is virtually impossible to quantify when you take into account subjective qualities like sound, appearance and comfort.
The $15 earphones last 3-4 months and I'm tired of spending an hour every few months to pick an ear phone, as well of the "music down time" that entails. That's why I started paying more. Hopefully my $60 ear phones last longer. I would rather not have to rely on the warranty.
But there is a "new - well not very new exactly -" economical trend to build products that have an end of life carved on them. So buying expensive stuff does not mean having long lasting products anymore. It was an old time story.
People who are too lazy to ammortize will spend a lot more money in the long run. The perfect example is the hilarious subsidized cell phone market in the US.
For me the most difficult thing about buying "quality" is the effort required in researching what the quality product is. It's been mentioned that price isn't always a good indicator, and the mainstream stores generally don't cater for people looking for quality.
For example, I'm buying a set of screwdrivers for a DIY job. I know I'll need screwdrivers for the rest of my life, I want to buy quality ones. I go to some big DIY store expecting a good range of screwdrivers. What I get is a selection of mickey-mouse screwdrivers (£5 for a set of 20) and some middle-of-the-road-but-overpriced screwdrivers (£20 for a set of 20). There is no "buy these and never buy another screwdriver again" set for £60-100.
You can get these, but it takes considerable effort to track them down.
A lot of people tend to buy middle-priced things. Marketers rely a lot on this fact, actually, to take advantage of your ignorance.
I've found it's much better to avoid middle-priced things, most of the time. Usually, the cheapest option will meet your needs just as well.
But then you need to identify the things in your life that really contribute to your happiness, and then pay what's necessary for full quality in those.
I spend top dollar on fresh meat and vegetables and on my kitchen pans and chef's knives and olive oils for salads. But I have the cheapest vegetable peeler and spatula and paring knives and toaster and olive oil for frying.
Author here - There are many good points here. The purpose of my article was to give a different perspective from the default "buy whatever is cheapest" method that I believe most people follow. Obviously it would be an error to buy things that that aren't better for more money, but I believe this error is often better than the opposite error, buying twice. A good example: I'm writing this on a 10 year old laptop running 1900x1200. Thanks for the comments and feedback.
One has to differentiate. There are things that are worth to have once and for life. But most things I gladly buy cheap - because I know I can dispose them later and not a fortune is lost. What If I spend much money on fashionable things that I like, but dislike in 2 years? I rather swap out most of my cheap stuff over the years rather than worry what will last longest and if I might still like it and so on.
Indeed. Since the article mentioned cell phones: I would say on average, it costs about $200/year to own a smartphone (service not included). $6000† if you maintain that for 30 years. Yet I cannot imagine paying $2,000 for a smartphone that will provide uninterrupted service for 30 years. It is far cheaper to have the single upfront cost, but the technology progresses so rapidly that your device probably won't even work with the communications systems of the day by then. It makes a huge difference on what you are buying.
† Realistically more like $15,000+ if you start to include the costs of not having that money, but we'll keep the calculations simple.
Reminds me of some gift buying advice I read. Given a specific budget, don't get a big-but-cheap item, but a higher-quality but smaller/simpler item. The latter is more likely to be valued and retained.
I think the example given, for a golfer, was a crafted/precious golf tee over a trashy electronic putting game. (Ignoring, of course, the fact that the tee might easily get lost.)
e.g. My dad has 2 Bosch drills ( http://i.imgur.com/aCkaq.jpg ). Roughly 20 years old. When you hold them in your hand you just know that it'll last another 40 years. As a result I have a really difficult time taking any of the modern drills seriously.
Feeling insecure about your place in life? Worried you're not happy enough, cool enough, or loved enough? You clearly aren't spending enough money. Don't bother creating things or building interpersonal relationships. Spend more time thinking about acquiring physical goods and making sure you're only getting the best.
Marketing comes into play. If not, items for sale would be using cost-based pricing.
A Mac and a PC would both can accomplish the same task. But one is more expensive than another. Being cheaper doesn't necessarily mean it won't last as long.
Tipping is one area that I don't understand about cultures that have them. Generally, I would expect the tip to be included in the price of the food. Why waste my time and have me figure out what amount to tip? Personally, I don't see the perceived value of tipping.
In some way, how much you pay is also determined by how you see yourself, or in some cases want others to see you.
To quote from the article:
"People who constantly try to always get that great deal end up spending all their time chasing those deals and never actually get things done. I’ve seen people do this their entire lives, and it is debilitating."
You can say the same about people who spend all their time trying to constantly get "the best" product. Figure out a few things that are important to you and maximise these - whether on quality or price. For the rest, learn to accept "good enough" and get on with your life doing things that matter for you.
The problem is that the modern consumer cannot associate cost with quality. I usually buy the cheapest appliance I can find (microwave, coffee machine, lawn mower) because it has the fewest bells and whistles and is likely the only one I can fix myself.
If I don't have the time to really look into things, I go with the cheapest too.
- You usually have exactly the quality you paid for, so no surprises here.
- It's often more ecological. If factory A can produce more stuff with same money than factory B, they must be doing something right. Another way to look at this would be: if you have to make shovels dirt cheap, you can't use barrels of oil/shovel, because you would have to pay for that oil.
I really cannot prove this cheap is ecological, but I've noticed that this holds true in plastic Christmas-trees, cucumbers and majority of unprocessed meat products. Chicken production should cause only 1/5 of the problems that beef production. Surprise, surprise chicken also cost's 1/5.
Where I live, ground chuck goes for $4/lb, and chicken breasts go for $7/lb. Not sure what the cost per pound of an entire steer versus an entire chicken, but I don't see the same price variance that you're writing about.
Also, the ecological impact might be because Crappy Factory A is manufacturing cheap shovels and dumping their toxic waste in a local river, while Factory B has to charge more because it's following industry standards and using a reputable waste handler.
Or Crappy Factory A might be using underage employees, or dumping product to eliminate its competition.
Drawing conclusions about manufacturers based on pricing is dangerous.
"Drawing conclusions about manufacturers based on pricing is dangerous." I completely agree. But in my opinion, drawing conclusions about manufacturers based on reputation is as dangerous. And it takes time to get that reputation info. Time I don't have many times.
Only reliable way to have good conclusions about manufacturers is to examine their business throughly. That's obviously just impossible in most cases.
PS. Chicken breast is expensive here too. I buy whole legs.
The key part of that is the line about services and tips. Just being a generous tipper gets you better service, and specially if you are a regular at the same restaurant or bar. 20% by default with an occasional bump up to 25% in tip gets you remembered and the servers get to know you.
I've had such a good relationship at some of my regular restaurants to the point where I once had ups deliver a package to the bar for me when I was out of town. Other places, the staff starts comping your drinks. My best one was the manager at a restaurant giving me a blanket 20% discount on anything I buy (I tip at least 25% after they put in that discount).
In the long run, you get better service if you pay for it.
Design determines manufacturing costs. Engineering determines durability. Marketing determines price. Coordinating all three is essential to delivering value. It's absurd to suggest that any one (or all) of them offer protection from obsolescence.
> This is so weird to me. No one haggles over $5 on the price of a car, but it seems that everyone needs a tip calculator to determine if they should pay 21.50 or $22.00 for a meal.
A $5 on a 2000 is 0.25% and a $0.50 on $20 meal is 2.5%
Is this relevant? If I get £50 off a house purchase and then tip the next waiter I meet £50 on a £50 meal, I'm no better off but the waiter will be ecstatic and the house-seller probably not more morose. The percentages are not terribly relevant to happiness, which is not well-correlated with money saved--see Dickens for more details. :)
My point was you save more for on $0.50 on a meal than a $5 on a car. In terms of pure monetary value, it is relevant. This comment was more in the light of an "alternate" theory as the author doesn't appreciate the fact that people haggle over $0.50 on a tip.
In terms of pure monetary value it is irrelevant, actually. Yes, $0.50 is much more a saving relative to meal price than car price, but it's still $0.50, aka. insignificant amount of money, usually not worth the time it takes to argue for it.
I usually eat at the same few restaurants all the time. They’re maybe 10% more expensive, usually locally owned, and the food doesn’t come out of a frozen pre-made bag before being tossed in the oven. I never tip less than 20%, and I’m not an asshole….at restaurants.
I don't understand this thought process. Why not pay 100% tip then? Is the 20% number somehow magical and affords the ability to be elitist? So if I tip 15%, which is the average suggested tip in Western Canada, I'm somehow an asshole???
Instead of overpaying, I think it's better to get the best product you can for the money you have. It does require you to learn how to recognize quality and know the prices, but it pays off in the end.
For example, I wouldn't buy a Ferrari or even Porsche 911 (both high quality cars, no doubt, but expensive) when a Nissan GTR R35 performs just as well and costs less.
All three will last a lifetime with a bit of care (I hate how people just use their tech without any maintenance, then wonder why "the POS" broke down!), so why pay more (aside from the design)?
Some people have other criteria to buying a car, emotional more often than not. For example, Ferrari's and Porsche's are known to a lot of common folk and associated with rich people, GTR - not so much. Also, different cars have different feel to driving them, different sound isolation, suspensions, seating position and road view, these tiny bits can be evaluated subconsciously even though you're after performance.
If I based my purchase only on performance I'd buy BMW S1000RR which performs just as well (albeit comes with less safety) than the other 3 and cost just a fraction!
If you just need to move from place to place Peugeot 308 will do as good as any of above.
You can get four of them with the price of GTR R35, so if one 308 doesn't last as long, you can get three more with the same price and every time with updated tech. And maintenance is probably cheaper too.
The problem with this "buy for life" stuff is that how do you determine what is really a "buy for life" product rather than just an over-priced "brand?"
For example, I could go out and buy a $200 pair of sunglasses but depending on where I buy them they can either be poor quality (e.g. fashion brands, sunglass hut, etc) or exceptional (e.g. fishing shops, sailing suppliers, workman-glasses, etc).
You would expect reviews to give you an accurate way to tell but people often review a product by the way it makes them FEEL rather than about the product its self.
Exactly. They just don't make things like they used to. I bought a $160 pair of boots once, thinking they would be great and last me a long time. They seemed solid, but they started leaking and cracking within a year. The next year I bought a $35 pair, which lasted the winter but sort of fell apart, and the next year I did the same again, which lasted three years.
The problem with paying more for higher quality is that there's little guarantee these days that price and quality are even correlated.
You answered your own question: given a choice, if you can buy from the supplier that sells to industrial/commercial users, the quality will usually be better.
e.g., I buy my T-Shirts from Tractor Supply. They are cheaper, much thicker and last longer than the ones I bought from American Apparel. Farmers are harder on clothing than the average urban dweller, I'm guessing.
The tools I buy from McMaster-Carr or Fastenal may cost the same or slightly more than the tools (often the same brands) from Home Depot or the local hardware store, but they are much better quality.
I agree with most of the ideas in this article with the small exception of the example he gives for services and hiring "the best firm in the country." I think you're mostly paying for overhead and bloat in those cases, and I would prefer to work with "the guy down the street" if I can (in which case I'd want to find the best "guy down the street," regardless of cost).
Other than that, it amazes me how people won't spend for quality in situations where it clearly is in their best interest for the long-term...
Would have preferred re-reading the Wikipedia article, personally (en.wikipedia.org/wiki/Time_preference) as it was better written, and considerably less self-satisfied in tone.
On the topic of paying less, there's a saying which goes something like this :
"the cheapest price you can get for a thing is to not buy it" [1].
Of course this can't be applied for everything but a lot of people, myself included, tend to buy a lot of gadgets they don't need and don't use.
This is a simple advice but I think it can go a long way to saving money.
[1] if someone has the exact quote, I'll be thankful for it.
The author is right but the problem at the moment is that more and more, you cannot correlate quality with price. That is, expensive gears can be of low quality. It is harder and harder to even be able to pay more knowing that you get more.
Also, the point missing is that you need to take care of your expensive gears. You need to put money into maintenance.
What about the selection bias? You don't see the watches your grandfather bought that didn't make it down to you because they broke. Of course the few carefully selected things that have survived and been handed down are the exceptional pieces!
Partly true, but I guess most of don't buy new things when the old ones are totally worn out. It is more like we just some new stuff for a change, not necessarily because what we have is broken. So it doesn't automatically save you money.
Great modern defense of penny-wise and pound-foolish.
The challenge is automation and commodification pushes us towards the lowest common denominator. Look at airlines, being forced into price, not quality.
Looks like an interesting article, but I can't bear to read it. Too much side-scrolling on my Blackberry. Why doesn't the text autofit my screen like other pages do?
A lot of commentators missed the point: "Sometimes a cheaper product is actually better. But consider removing price as the default decision criteria."
Actually cost has very little relation with cost to quality in denim jeans, besides that there is a production cost for higher quality denim fabric and stitching which doesn't seem to factor much into pricing besides increasing the minimum.
> My favorite pair of jeans gets worn 10 times more often than my other jeans. If I did away with the other jeans, I could afford to buy more of those things I really love.
This took me embarrassingly long to realise. Instead of buying clothes because they were pretty nice and on sale, buy only what you absolutely love, and pay full price. Instead of having "favourite underwear", get rid of everything that's not your favourite and make sure you only own favourites.
Yeah, it costs more at first. But over time you build up a wardrobe of high quality clothes you love. Quality over quantity, indeed.
huh. my jeans usually fail through use; they don't usually languish.
The thing is? I have some costco brand jeans I bought during the first dot-com that I still wear. they were under $15. Actually, at the same time I bought a bunch of designer jeans. The designer jeans all failed (at least one of them catastrophically... dramatically ripping the crotch wide open as I lifted a server in front of something of a crowd.) within a year of purchase.
My experience has been that expensive things are not always better. In fact, expensive clothing is usually designed for rich people, who don't need to lift things or trace cables through crawlspaces, and who will want clothing of the new style next year anyhow.
Clothing designed for working people is usually much more durable. And yeah, you can sometimes get increased durability by buying something more expensive within that sector? but the nicest dickies brand work pant is on par with the designer jeans they sell at target, price-wise.
So yeah, in general? if you are selecting for durability in clothing? the price signal is actually the opposite of what you want to look at.
I have a friend who used to buy jeans from Costco. If he was ever with me when I was buying clothes, he would always be shocked at the money I was spending on jeans (I'm not talking designer, I mean £40 high-street jeans, that kind of thing). He would say that I could buy 2 or 3 pairs for the same price at Costco and there'd be no difference.
I challenged him to buy a pair and now that's all he wears. They last longer (his old ones used to rip at the crotch) and feel much nicer to wear. However, you're right, price sadly isn't too good an indicator now. I doubt that spending £100 on jeans will provide much improvement over the kind of jeans I wear but buying slightly more expensive - as opposed to dirt-cheap - is definitely worthwhile.
eh, I think that most of what you are paying for is, well, paying more.
I mean, today, the kids are buying $400 jeans that are thick and tough (then they don't wash them, which sounds disgusting, but what do I know?) but, you know, at least they are probably durable. But during the first dot com? the expensive jeans were made of this super thin denim that was then pre-stressed at the factory;
So yeah, in '99? if you walked in to a store and bought the very cheapest jeans you could get, you'd get a medium weight denim that was reasonably durable. If you spent USD$50-$80 for the 'calvin klein' low end designer stuff? it was this ridiculously thin denim that had been bleached to hell.
But yeah, my point is that if you really do choose your product based on price positioning, rather than on the merits (and price) of the product? you are likely making suboptimal choices. Just because there is a more expensive version and a cheaper version available, that doesn't make the middle of the road choice the most reasonable.
A more recent example: I recently got a giant TV for the office for my montoring setup, and I lost the HDMI cable it came with.
I went to Frys, and the first HDMI cable I saw was the $150 "monster cable' version. So I look a little further, and I see a $15 cable by some middle of the road cable company. I look further, down on the bottom, and I see a $1.50 HDMI cable with no brand.
as far as I can tell, they were the same gold-plated HDMI cable. Of course, I bought the cheapest version and it worked just fine.
I mean, I always spend the extra money for ECC ram and for 'enterprise' or 'raid edition' drives in stuff that matters. Yeah, if I get more of what I want for the money, I'll pay more. But I have to see evidence that I'm getting more of what I want. I'm unwilling to pay extra for a label that says I paid extra.
Clothing in general seems much cheaper in the US than in Europe (I live in Denmark but buy most of my clothing when I visit the US). Seems like some mix of economic and cultural factors. Clothing shops in Denmark seem more commonly to be boutique and have higher-end stuff; e.g. Levi's would be the low-end here, whereas in the US Levi's is mid-market. And there don't seem to be discount shops like Ross. Taxes also make about a 25-30% difference: the EU has a ~10% import tariff on apparel (to protect the European fashion industry), plus Sweden's 25% VAT, so ~35% total taxes, versus a typical 5-10% sales tax in the US.
Levi's are what I'd call 'designer jeans' or maybe low end designer jeans. I mean, uh, I might be using that word incorrectly, but yeah, they are very expensive compared to off-brand jeans of similar quality. (I believe you can mostly evaluate the quality of jeans with your eyes and your hands.) I dono exactly how much I'd pay for them here, just, well, probably more than I'm willing to pay.
Levi's are "Name brand" or something like that. The more expensive stuff in box stores are designer branded or something like that, not actually designer clothing.
Macy's is probably the low end for actual designer stuff.
And yeah, jeans are cheaper in the U.S., Levi's go for ~$40-$60.
ah. Then I am using the word incorrectly, and I have no experience with designer clothing. I guess it could be great? seems unlikely, but what do I know? The designer brand stuff sounds like what I'm talking about- it's clearly made to look a certain way, and long-term durability has little to do with it.
I have a friend in Finland (Hyvinkää) who comes over to America on business trips a few times a year. When he's here, he buys things like jeans, nice shirts, golf equipment etc and has them mailed back home. Even paying the taxes at customs, he says it's cheaper than buying them in Finland.
The Wrangler jeans I'm wearing right now (wonderful pair of regular jeans) cost me $20.
> The Wrangler jeans I'm wearing right now (wonderful pair of regular jeans) cost me $20
Wow, in Italy Wrangler costs around €70, some models are over €100.
I don't buy them anymore because I noticed they deteriorate faster than other slightly more expensive trousers, but for $20 they are really good!
I spend more money on things I use all the time. My computer, bed sheets, jeans, etc... all have higher threshold of diminishing returns to me. I think you make a good point about the build quality of 90s jeans and jeans today. With that stated, while I like my 'designer' jeans I'm still likely paying too much. They do last longer than other cheaper jeans I have owned, but this could be a function of me being picky. The last time I bought jeans I had to go through many pairs to find ones that were not pre-torn. Why would I spend good money for jeans that are already ripped?
eh, I guess my problem was more with this idea that expensive stuff usually lasts significantly longer. From what I've seen, it usually doesn't. Expensive stuff usually isn't optimized for use per dollar.
If the expensive stuff is giving you value on another axis? like the higher thread count sheets being more comfortable or what have you? that's great. I buy luxury items too. And I am willing to pay significantly more for tools that are easier or more comfortable to use.
I was just taking issue with the idea that expensive stuff is usually cheaper in the long run.
You should buy luxury items when you think the enjoyment you will get out of them is worth more than the money you spend on them. If someone tries to tell you that the luxury item is actually cheaper in the long run than the 'value' item, (the item actually designed to maximize use per dollar) well, I suppose it's possible, but it's pretty unlikely. You should be very, very suspicious.
I don't think anything 'designer' is what the OP was talking about. You're certainly right that designer clothes are not necessarily the best quality, as they are being sold on (at least perceived) exclusivity.
I do wear expensive jeans because they're comfortable and nicely made. I like a German brand called Hiltl:
Poor people end up getting worse deals on things though since they often have fewer resources available to them. If they wanted to pay more for something that will last, they may not have that option if they don't live in or around an affluent neighborhood. It's more expensive to be poor.
Some things fall somewhere in between. Your grandfather's watch is a marvel of mechanical engineering that will keep time adequately for centuries if taken to a watch-shop for maintenance every few years. That maintenance will cost more than buying a new timex would, and the timex will keep far more accurate time. Timex's are disposable. When the timex's battery dies it will probably cheaper to replace it than to replace the battery. However, their function is superior for all practical purposes. Many people currently enjoy the aesthetics of mechanical watches. They're currently enjoying a major surge of collectibility, but that wasn't the case twenty years ago and it may well not be the case twenty years from now.
The real trick is to figure out what can last and what should be treated as disposable. e.g. Say you're building a home theater. Amps have changed very little over the last 20 years. Preamps and receivers go obsolete every few years. If you spend $5000 on a Bryston amp it will easily last 20 years (that's how long it'll be under warranty!), but a Bryston preamp will be hopelessly unusable long before that 20 year warranty runs out.
There are also big variations in short-term durability too that aren't necessarily correlated with price. e.g. Macbook air's and the new retina pro's are gorgeous pieces of engineering, but they're made to be disposable. If you spill coffee on them they're basically done. You can't remove the battery and take them apart to clean them (proprietary screws) like you can with a much cheaper laptop and Apple won't lift a finger to help you. This is a case where our perceptions of what is durable and high-quality can actually lead us to buy something that won't last as long!